G.R. No. L-18944 October 29, 1965
LUIS ATIENZA BIJIS, TRINIDAD REYNOSO, SIMPLICIO CAPISTRANO, and ROBERTO QUEJANO, petitioners, vs. HON. COURT OF APPEALS, CATALINO PALERNO and SIMEONA PALERNO, respondents.

FACTS

Teodora Reynoso was the registered owner of Lot No. 3678. On June 8, 1939, she executed a document purporting to be a sale with right of repurchase in favor of Esperanza Quejano for P450.00. No repurchase was made, and ownership was consolidated in favor of Esperanza Quejano, with Transfer Certificate of Title No. 16706 issued in her name. In 1944, Esperanza Quejano mortgaged the property to petitioner Simplicio Capistrano to secure a loan of P10,000 in Japanese military notes. After Esperanza Quejano’s death in 1946, TCT No. T-4998 was issued in the name of her heirs, later cancelled by TCT No. T-4999 solely in the name of petitioner Roberto Quejano. Teodora Reynoso then instituted Civil Case No. 4953 against Roberto Quejano, seeking reconveyance of the property, claiming the transaction was an equitable mortgage, and caused a notice of lis pendens to be annotated on the title. On December 7, 1951, the court rendered judgment declaring the pacto de retro sale to be a mere equitable mortgage, ordering the cancellation of TCT Nos. 16706, 4998, and 4999, and requiring Roberto Quejano to execute a deed of conveyance in favor of Teodora Reynoso upon payment of P450.00. After the period to appeal lapsed, Simplicio Capistrano instituted Civil Case No. 6516 against Roberto Quejano to recover the mortgaged debt, obtained a judgment, caused the mortgaged property to be sold at public auction, and became the highest bidder, resulting in TCT No. T-17103 issued in his name, subject to the notice of lis pendens. Roberto Quejano then executed a deed of conveyance of Lot 3678 in favor of Teodora Reynoso on April 7, 1953, upon receipt of P450.00, but no new certificate of title could be issued because the owner’s copy of TCT No. T-4999 was presented as an exhibit in Civil Case No. 5416 and a motion for its withdrawal was denied. Simplicio Capistrano subsequently sold the property to petitioners Luis Atienza Bijis and Trinidad Reynoso, in whose name TCT No. T-17237 was issued, subject to the notice of lis pendens. Teodora Reynoso died on June 26, 1953, leaving respondents Catalino and Simeona Palermo as her only heirs. On January 26, 1954, respondents filed a motion in Cadastral Case No. 10 seeking to compel the Atienza Bijis spouses to surrender the owner’s copy of TCT No. T-17237, the cancellation of the transfer certificates of title, and the issuance of a new certificate of title in their names. Petitioners objected, questioning the jurisdiction of the cadastral court. On January 12, 1956, the court issued an order granting the motion, directing the surrender and cancellation of titles and the issuance of a new title in respondents’ names. The Court of Appeals affirmed this order.

ISSUE

Whether the court of origin, exercising the limited jurisdiction of a cadastral court, had authority to consider respondents’ motion and grant the relief prayed for therein.

RULING

Yes. The final judgment in Civil Case No. 4953 had conclusively resolved the nature of the contract as an equitable mortgage and ordered the cancellation of the specified transfer certificates of title and reconveyance. The motion filed by respondents was for the exclusive purpose of implementing this final judgment by praying for the registration of the deed of reconveyance, the surrender of the owner’s duplicate certificate of title, and the cancellation of the subsequent titles. Under Section 112 of Act 496, the lower court, acting as a court of land registration, had jurisdiction to consider the motion and grant the relief. Petitioners had purchased the property and accepted the transfer certificate of title subject to the notice of lis pendens, binding them to accept the outcome of Civil Case No. 4953. The order appealed from is affirmed.